Thanks so much for watching! 👍 ⭐ If you found this useful or if it helped you in anyway and you want to support the channel you can do so using the 'SUPER THANKS' button above! See you next time!
I wish I could retire at 55, but seeing as im 57 already!! I also have no prospect of retiring at all, ever. I will unfortunately have to work until I die. They should teach a full retirement planning at school, it should become second nature. To all young people, NO, you don't have enough time. You cannot worry about it later. You need to plan NOW.
@@EdmundBaileyUK Unfortunately not. Ive never earnt very much money and now im self employed its impossible to take advantage of employer contributions etc. In hindsight i should have contributed even if it was small. Compound interest was an alien concept to me.
My advice to everyone is to start planning in your 20's.I started a pension scheme at 21 in 1982,when I was a driving instructor. I joined a final salary pension scheme for 30 years -Transport for London,working for the London Underground. My wife has two pensions,one of them in the NHS. I started planning for my retirement 10 years before I retired. I retired 5 years ago in 2017,when I was 55. We paid our mortgage off,and took the maximum lump sums of 25% tax free,from our pensions,and put a substantial amount into a stocks and shared ISA.(Growth of 7%) in the last 5 years We have always lived within our means,while enjoying life. We have large cash reserves,and a substantial portfolio. This feeds money into our tax free ISA.Our jobs were nothing special,but with careful planning and by making right choices,we have more money than we know what to do with for the rest of our lives. Are we lucky? Well, we thought ahead and planned it all,and it worked!
People often wonder when they can retire- and the numbers are unreliable. At 55 you are talking about 30 years at least. A forecast done 30 years ago would look entirely different. Plus your inflation rate is not the same as CPI- it can be very different. One thing that you can be certain of- the assumptions will change- i.e. they are wrong. There is another way- part retirement. In your 50s, you are probably at your highest earning, and your lowest expenditure. You have bought the capital goods and just need to replace. Kids left home or ant least independent. You may well be in higher tax brackets. Inefficient. At 52 I gave up the day job, and started working ~30hrs a month (around 8 hours a week). Done when I wanted, where I wanted, it kept me in standard rate tax and (because I enjoyed the work) was like a paid hobby. So much so that I carried on until 75, even though by then I was massively over-funded. It did not interfere with my life, I could travel and still continue. Not possible for everyone, but for those that can it is the safest method, because there are built in hedges against unexpected changes in the financial landscape. And you get to play golf as often as you like...
Thanks Mike. Yes there are many ways to retire and it is definitely not a one size fits all. But the key is that individuals should have an eye on how they will fund their retirement or the lifestyle that they wish to have. Again, things do change and plans that have been made should be reviewed and adjusted accordingly. I would never suggest that anyone should blindly assume all would be OK and not to make a plan at all would be crazy. The crucial aspect to this is a broad recognition of an approximate sum of money and the level of income that it could produce in conjunction with the New State Pension and the impact inflation can have. I'd rather people think about these elements than not at all. Thanks again for the comment and support.
Thank you Ed, this was full of info and I do love some statistical analysis to show all of the possible scenarios. In essence, you can retire at 55 but need to invest more and keep fees and daily expenses low. I've seen you have done a video on NHS pensions and wondered if you could do one looking at Government employees more broadly? I invest in the Local Government Pension Scheme with salary sacrifice of 6.5%. I've done some of my own research to find out my employer contributions and rates of return but maybe you could give a more professional approach to the subject. It is a massive pension fund so I'm sure there will be a ready audience for it!
Yes please, I would love to attend a live session. Your videos are so informative, particularly for those of us planning to retire but not really having a great resource to turn to for Qs due to Covid restrictions inc. Pre-retirement courses being cancelled etc
Thanks so much Ann. I’m trying to get something set up to be able to do so but don’t quite have the right tech to make it work!! I’m hopping to get something sorted out soon! 👍👍
I retired from NHS at Age 55. I told my story on my RUclips channel. It seems to me that many people are not aware that they can retire at Age 55. Of course there is a Pros and Cons to it.
Edmund, thank you so much for producing this video, it is both super informative and pitched at an understandable level. I hope others appreciate your hard work and time given. I have struggled to locate material on this exact subject, which you have now kindly covered. Again I thank you......
Thanks so much for the kind words Darren, really appreciate it!!! Makes it feel worth it!!! 🙏 I’ll try and set up some live sessions to help answer questions if I can get the tech side, timings and enough interest.
@@EdmundBaileyUK count me in too if ever you do...hubby is about to retire but couldn’t decide if he transfer his final salary pension to a drawdown pension...thanks
I know you have simplified this model but in real life scenario it is often a lottery when one will run out of money due to market volatility. To mitigate volatility risk I like the approach that professor Pfau suggest: have a floor to cover you minimum expenses - this can be annuity. The rest of the pot should then stay invested and drawdown of this part should be scalable: you draw less when market performs poorly and you draw more when market performs well.
Love the video I turn 55 this year I have old company pension policies in the uk one is a section 32 I live in the USA been here nearly 10 years I have been trying to get the funds moved here to be invested for my retirement and also try and make tax filling a little less complicated but the insurance company in question doesn’t want to know saying you can’t have the funds your not retirement age.
Thanks so much Mark!! Oh wow the tax treatment of UK pensions in the US!! I’ve heard so many differing things on this including that the tax free cash is actually taxable when brought into the US!! I can see why you’d want to simplify your arrangements! Have you also built up UK State Pension entitlement as well?
Hi Edmund, my company pension at age 55 is approx £120,000 lump sum (tax free)with a P/A of £15,000. I have paid off my mortgage and only have utility bills etc of roughly £700 a month, although I could reduce this to £500 if I needed to. Do you think this is enough to retire as my health is failing and may not have any choice but to retire early next year when I’m 55.
Thanks for the question Greg Greg. With no mortgage then that puts you in a hugely advantageous position, so welldone on that front. The company pension sounds very good to. Without knowing all the details it sounds feasible and ultimately comes down to knowing/estimating your budget in retirement and that the life you will lead based on that income and your expenses is sufficient or good enough versus continuing to work especially, as you say your health is failing. Sorry its hard to give a completely concrete answer as it does come down to knowing and having all of the information.
Really interesting video albeit you did lose me a little half way through. I've never really been able to get my head around pensions. I'm currently 50 and have only just looked properly into my pension I took out at 18 and the one I contracted out into at 26. Neither of them have performed brilliantly so I have moved them both now into one. My mortgage isn't paid off until 62 so don't think I'll be able to retire at 55 alas.
Thanks for the comment Mark and sorry i lost you half way through, it isnt the most exciting subject in the whole world! But welldone on engaging with your pension and knowing where you are, thats a large part of the battle. Know its about working out where you are going!
brilliant info and much appreciated. could you please also do a video on options of cashing in private pension. i.e flexi drawdown , lumpsum and tax implications.
Thanks so much for the comment and support Bhavesh!! That’s a great suggestion and I’ll see what I can do!! It’s a key area and flexi access is definitely the direction of travel for the majority of private pensions!
This is great, thank you. I’m interested SIPP and fund management charges and general transparency in the private pension sector. This video highlights the implications for certain choices. Does a high charge equal better returns? I find it difficult to find a really clear overview. Your style is very reassuring and straightforward. Could you make a video on best and worst providers and what to look out for? Am I paying too much? Should I be charged for advice? Should I switch? Can I switch? Etc. Thank you and keep up the excellent work!
Thanks so much for the kind words!! And completely agree in regards to transparency, the industry is far better than it was say 10 years ago and progress has been made in regards to providers showing their charging structures clearly. Its a great idea for a video and it sounds a bit wish washy but in terms of comparing one provide against another it depends on the objectives of the individual (self manage/buy shares or ETFs, invest in model portfolios etc) and the size of fund involved. A larger fund value would typically be better off going for fixed fees and a smaller fund would be better suited to a % based one. However, some providers have a combination of both % based and fixed fees. I'll have a think about how that could be presented in regards to the options and cost implications. And as a general rule investing is probably one of the few areas where you don't get greater returns the more you spend! Thanks again!
Thanks Steve!! 👍 They really are and it isn't helped much by the, what feels like constant changes by the government in regards to legislation, allowances and taxation!!
Thanks!!! Oh yeah, it’s the classic impact of the hit on the ability to compound overtime... and that’s just 1%, at 2% it’s horrendous!! Also the impact of inflation is also greatly under appreciated.
Hello. Thank you so much. Very useful. Would be amazing if you could do a video to cover this scenario for a single person as well :) Is there a way I can access the template you used for these calculations or similar? Thank you
Thanks, great suggestion!! Unfortunately, no its still not available for individuals to access although i am hoping a version will be made available soon.
In the second example you state that the couple contributes £425 per month each from the age of 22 - does that include the 25% added on from HMRC? E.g. £340 X 1.25 = £425 Thanks
If you did your yearly drawdown and so you had enough to pay yourself from the drawdown 12,500 per year so you could still pay £4000 into your pension.? I could pay myself out my company up to £4000 per year which I would be taxed on but when I put it back into my pension would I get that tax back. So in theory you would get 16,500 per year? Is that possible
Glad to have found you on RUclips. Your contents are really helpful. The way you explain tricky concepts for small-brained like me is very clear. Would you mind to share the software or spreadsheet that you used on this video?
Wow!! That’s really kind, makes it feel worthwhile. Unfortunately it’s isn’t but I am pushing the company to make it available to the public as the licenses are expensive! The company is CashCalc.
Thanks!!! Yeah the idea is to run multiple scenarios to see the likelihood of achieving something!! It’s easy to forget that market downturns do occur and can last a few years...
I'm 60 and work for a railway company, I would like to retire at age 62. However as you suggest, everyone's personal circumstances wre different and I think I will go part time as long as possible. I live on my own and am concerned about becoming socially isolated. Going part time has benefits like being still eligible for my European railway pass, credit union etc. For single people it's the way forward.
You don't have to be socially isolated,once retired! Do volunteer work.My wife works in a railway tea room,and before covid I was a volunteer at Brooklands Motor museum.Its fun chatting to new people,and being socially active. Retiring is the end of something and the beginning of something new and fun,if you have the right attitude! Good luck and keep well.
I see a lot of videos of people having already paying into a pension when they’re young but surely the problem now is.... people like me in the mid 30s thinking shit I need to invest more in my pensions and savings
@@EdmundBaileyUK that’s what I’ve been looking for advice on but it’s all mostly videos to people at the beginning of their pension career but not for people realising today they need to have a pension, pay into a pension and have some savings to live a comfortable retirement.
Thanks so much Saleem!! Appreciate the support!! 🙏🙏 Yes, I think live sessions would be a great way to answer questions as this can be quite a complex area and allows people to follow up with any additional questions that they might think of at the time!
Great videos Edmund,I'm afraid a lot of it went over my head. Would you recommend I talk to an independent advisor if I think I'm being conned by my workplace pension?
Ed, are you running any online workshop. I am interested in a live session and know another two who would be. I have MHO status. I started at 18 and reach 55 in two years. I was tapered in 2017 on to the 2015 pension. Are you aware that MHO status is not acknowledged on total rewards?
Question? I have a public sector pension that takes all my yearly personal tax allowance. I also have a personal sipp and an ISA. I was wondering if it could be a good idea to drawdown my SIPP by £20,000 a year to fully subscribe my IAS each year for a tax free income. Is this better tax wise.
Thanks for the question Mark. So the starting point here is generally that taking from a pension to fund an ISA doesn’t really add any tax benefit. Especially where you have a potential IHT issue as the pension is outside the estate whereas the ISA is not. Also the pension can be passed to a chosen beneficiary (children) whereas the ISA value can be used by the spouse only. So generally speaking we will look to use the pension last when using wrappers… e.g. cash first, then ISA and then pensions. As you can imagine here it’s about your beneficiaries here as well and what your objectives are, but essentially I see little value in paying basic rate tax, e.g. lose 20% just to pay that into an ISA. Especially when you consider the 20% given up in tax would have given you further growth/returns that the ISA would lose out on (as long as the investments make a return). Thanks again for the question it’s an interesting one and there’s a little bit of ‘it depends’!
Thanks Simon!! Very kind. Yeah its a really good piece of kit called CashCalc but its unfortunately 'presently' only available to companies. I understand that they are looking into a direct to customer version but this always takes ages and the cost realistically would need to come down significantly. Thanks again.
I've never heard of the Monte Carlo test before... But it's probably going to be 2050 before I can retire after the government raises taxes to repay the debt lol Awesome video L17
Haha, yup there's a whole lot of debt to repay!! Thanks for the support and yeah its a useful tool to attempt to gauge over 10000 market simulations to see whether a plan is likely to succeed or not.
'Monte Carlo' is a good name for these simulations- because in the casino the odds are known. Sadly, in life, this is not the case. Black swans happen- unknown unknowns. Most major financial events were not foreseen, because they were not foreseeable. Simulation cannot, repeat cannot, capture them. Financial plans are like military plans- they fall apart at first contact with the enemy. Financial advice always recommends a diverse portfolio- but then sticks largely to financial products. That is not diverse- it is very narrow.
Thank you for the comment Mike. Yes, indeed ''events'' do and will happen. Everyone has a plan until they get punched in the face as an infamous boxer once said. However, you still should have a plan, and the critical point here is that one should live below ones means and save and invest the difference to ideally seek a return above the rate of inflation/return on cash. The monte carlo calculator simulates over 10,000 markets events at the upper and lower extremes and even then we could indeed have a black swan event that wipes us all out. Having said that even with all of those crazy market events, 2000, 2008, brexit, pandemics, etc and many before it, you can still arguably have remained invested in an index and had a fairly consistent return over that period. There are the factors we can control and those we cannot. We have to pay attention to the areas we can control! And i don't think anyone would be reckless enough to go into battle without a plan of some kind but contingencies should be in place should the plan change, which it inevitably will!! How do you fancy doing a collaboration video on investing/retirement, I think it would make for an interesting conversation?
@@EdmundBaileyUK Love to! I wrote a book on financial matters called 'Enough!' (because enough is all you need)- bit out of date now, but it is a subject that has always interested me (indeed, I cannot understand why others are not...) How do we get in touch?
@@Tensquaremetreworkshop I'll look it up!! Probably best to drop a direct message/email somehow and see if we can sort something out and how it might work!
@@EdmundBaileyUK My understanding is that you tube has discontinued direct messages, but there is a way around- if you go to blewshed.home.blog (A site I manage for the Men's Shed movement) there is a contact page, from which I can collect your email address. Looking forward to hearing from you!
Very interesting vs the usual rubbish you find on this topic and makes me feel more confident about being able to retire at 55 (other than not maximising tax by having equal pensions). I think in hindsight most people wish they had contributed more earlier on to get the compounded benefit but you can catch up later on. Ive been focusing (especially during lockdown with reduced outgoings) on maxing my pension contributions to benefit from salary sacrifice / no tax. Other than maxing out a Lifetime ISA for as many years as possible, are there any other must have savings vessels to help bridge that gap between 55 and 67/68 state pension age (lucky me I turn 67 9 days after state pension age changes to 68)?
@@EdmundBaileyUK Thank you Edmund and doesn’t have to be no callbacks from job applications,which was my biggest fear, but more and more people are getting sicker younger and unable to work for one reason or another.
@@EdmundBaileyUK My sir am thinking of using up a pension plan I have am 63 at present its fund value is enough to get me to 66 when the state pension kicks in I would have to live of a monthly drawdown payment but is does mean I could stop work early I would have to pay all my rent out of it can't I receive any benefits to go with it your views please regards bob
@@sarahmakepeace26 Dear Sarah are you stuck with job seeking rules on benefit the only way around this is to get a medical exam so you qualify for a ulternative benefit which would give you a fair income with no job seeking rules
I'm really sorry to read this Leslie. There are some absolutely horrible scams out there. It is limited as to what I can do as it becomes a police matter. You need to contact your pension provider immediately and report it to Action Fraud either on the phone 0300 123 2040 or via their website. Action Fraud will collect the information and give you a police crime reference number. Link to Action Fraud: www.actionfraud.police.uk/
Thanks so much for watching! 👍
⭐ If you found this useful or if it helped you in anyway and you want to support the channel you can do so using the 'SUPER THANKS' button above!
See you next time!
I wish I could retire at 55, but seeing as im 57 already!! I also have no prospect of retiring at all, ever. I will unfortunately have to work until I die. They should teach a full retirement planning at school, it should become second nature. To all young people, NO, you don't have enough time. You cannot worry about it later. You need to plan NOW.
Thanks for the wise words Campervan Dave! Did you not build up any pensions over your working life?
@@EdmundBaileyUK Unfortunately not. Ive never earnt very much money and now im self employed its impossible to take advantage of employer contributions etc. In hindsight i should have contributed even if it was small. Compound interest was an alien concept to me.
My advice to everyone is to start planning in your 20's.I started a pension scheme at 21 in 1982,when I was a driving instructor.
I joined a final salary pension scheme for 30 years -Transport for London,working for the London Underground.
My wife has two pensions,one of them in the NHS.
I started planning for my retirement 10 years before I retired.
I retired 5 years ago in 2017,when I was 55.
We paid our mortgage off,and took the maximum lump sums of 25% tax free,from our pensions,and put a substantial amount into a stocks and shared ISA.(Growth of 7%) in the last 5 years
We have always lived within our means,while enjoying life.
We have large cash reserves,and a substantial portfolio.
This feeds money into our tax free ISA.Our jobs were nothing special,but with careful planning and by making right choices,we have more money than we know what to do with for the rest of our lives.
Are we lucky? Well, we thought ahead and planned it all,and it worked!
People often wonder when they can retire- and the numbers are unreliable. At 55 you are talking about 30 years at least. A forecast done 30 years ago would look entirely different.
Plus your inflation rate is not the same as CPI- it can be very different. One thing that you can be certain of- the assumptions will change- i.e. they are wrong.
There is another way- part retirement. In your 50s, you are probably at your highest earning, and your lowest expenditure. You have bought the capital goods and just need to replace. Kids left home or ant least independent. You may well be in higher tax brackets. Inefficient. At 52 I gave up the day job, and started working ~30hrs a month (around 8 hours a week). Done when I wanted, where I wanted, it kept me in standard rate tax and (because I enjoyed the work) was like a paid hobby. So much so that I carried on until 75, even though by then I was massively over-funded. It did not interfere with my life, I could travel and still continue. Not possible for everyone, but for those that can it is the safest method, because there are built in hedges against unexpected changes in the financial landscape. And you get to play golf as often as you like...
Thanks Mike. Yes there are many ways to retire and it is definitely not a one size fits all. But the key is that individuals should have an eye on how they will fund their retirement or the lifestyle that they wish to have. Again, things do change and plans that have been made should be reviewed and adjusted accordingly. I would never suggest that anyone should blindly assume all would be OK and not to make a plan at all would be crazy.
The crucial aspect to this is a broad recognition of an approximate sum of money and the level of income that it could produce in conjunction with the New State Pension and the impact inflation can have. I'd rather people think about these elements than not at all.
Thanks again for the comment and support.
Thank you Ed, this was full of info and I do love some statistical analysis to show all of the possible scenarios. In essence, you can retire at 55 but need to invest more and keep fees and daily expenses low. I've seen you have done a video on NHS pensions and wondered if you could do one looking at Government employees more broadly? I invest in the Local Government Pension Scheme with salary sacrifice of 6.5%. I've done some of my own research to find out my employer contributions and rates of return but maybe you could give a more professional approach to the subject. It is a massive pension fund so I'm sure there will be a ready audience for it!
Yes please, I would love to attend a live session. Your videos are so informative, particularly for those of us planning to retire but not really having a great resource to turn to for Qs due to Covid restrictions inc. Pre-retirement courses being cancelled etc
Thanks so much Ann. I’m trying to get something set up to be able to do so but don’t quite have the right tech to make it work!! I’m hopping to get something sorted out soon! 👍👍
I retired from NHS at Age 55.
I told my story on my RUclips channel.
It seems to me that many people are not aware that they can retire at Age 55. Of course there is a Pros and Cons to it.
Edmund, thank you so much for producing this video, it is both super informative and pitched at an understandable level. I hope others appreciate your hard work and time given. I have struggled to locate material on this exact subject, which you have now kindly covered. Again I thank you......
Thanks so much for the kind words Darren, really appreciate it!!! Makes it feel worth it!!! 🙏
I’ll try and set up some live sessions to help answer questions if I can get the tech side, timings and enough interest.
@@EdmundBaileyUK That would be v cool, I got lots of questions if you do
Ok great! I’ll see what I can do!
@@EdmundBaileyUK count me in too if ever you do...hubby is about to retire but couldn’t decide if he transfer his final salary pension to a drawdown pension...thanks
Thanks so much!! I’m looking into technically how I can get it to work! 👍
I know you have simplified this model but in real life scenario it is often a lottery when one will run out of money due to market volatility. To mitigate volatility risk I like the approach that professor Pfau suggest:
have a floor to cover you minimum expenses - this can be annuity. The rest of the pot should then stay invested and drawdown of this part should be scalable: you draw less when market performs poorly and you draw more when market performs well.
Really interesting one mate. I'm a long way off the pension age but always nice to look ahead!
Haha 💯 agreed!! And it sneaks up fast!! I don’t think I have ever had anyone say they they wished they had saved ‘less’... 🤔
Love the video I turn 55 this year I have old company pension policies in the uk one is a section 32 I live in the USA been here nearly 10 years I have been trying to get the funds moved here to be invested for my retirement and also try and make tax filling a little less complicated but the insurance company in question doesn’t want to know saying you can’t have the funds your not retirement age.
Thanks so much Mark!!
Oh wow the tax treatment of UK pensions in the US!! I’ve heard so many differing things on this including that the tax free cash is actually taxable when brought into the US!! I can see why you’d want to simplify your arrangements!
Have you also built up UK State Pension entitlement as well?
@@EdmundBaileyUK yes 1983 to 2011
Hi Edmund, my company pension at age 55 is approx £120,000 lump sum (tax free)with a P/A of £15,000. I have paid off my mortgage and only have utility bills etc of roughly £700 a month, although I could reduce this to £500 if I needed to. Do you think this is enough to retire as my health is failing and may not have any choice but to retire early next year when I’m 55.
Thanks for the question Greg Greg. With no mortgage then that puts you in a hugely advantageous position, so welldone on that front. The company pension sounds very good to. Without knowing all the details it sounds feasible and ultimately comes down to knowing/estimating your budget in retirement and that the life you will lead based on that income and your expenses is sufficient or good enough versus continuing to work especially, as you say your health is failing. Sorry its hard to give a completely concrete answer as it does come down to knowing and having all of the information.
@@EdmundBaileyUK Thanks for the feedback, much appreciated.
Only you know that!
It depends how much you spend
Really interesting video albeit you did lose me a little half way through. I've never really been able to get my head around pensions. I'm currently 50 and have only just looked properly into my pension I took out at 18 and the one I contracted out into at 26. Neither of them have performed brilliantly so I have moved them both now into one. My mortgage isn't paid off until 62 so don't think I'll be able to retire at 55 alas.
Thanks for the comment Mark and sorry i lost you half way through, it isnt the most exciting subject in the whole world! But welldone on engaging with your pension and knowing where you are, thats a large part of the battle. Know its about working out where you are going!
brilliant info and much appreciated. could you please also do a video on options of cashing in private pension. i.e flexi drawdown , lumpsum and tax implications.
Thanks so much for the comment and support Bhavesh!!
That’s a great suggestion and I’ll see what I can do!! It’s a key area and flexi access is definitely the direction of travel for the majority of private pensions!
Ooh I really like this, going to discuss retirement in my next video. Well done for sharing, and good luck for 2021!🔥
Awesome! Thank you! You too!
This is great, thank you.
I’m interested SIPP and fund management charges and general transparency in the private pension sector. This video highlights the implications for certain choices. Does a high charge equal better returns? I find it difficult to find a really clear overview. Your style is very reassuring and straightforward. Could you make a video on best and worst providers and what to look out for? Am I paying too much? Should I be charged for advice? Should I switch? Can I switch? Etc.
Thank you and keep up the excellent work!
Thanks so much for the kind words!!
And completely agree in regards to transparency, the industry is far better than it was say 10 years ago and progress has been made in regards to providers showing their charging structures clearly.
Its a great idea for a video and it sounds a bit wish washy but in terms of comparing one provide against another it depends on the objectives of the individual (self manage/buy shares or ETFs, invest in model portfolios etc) and the size of fund involved. A larger fund value would typically be better off going for fixed fees and a smaller fund would be better suited to a % based one. However, some providers have a combination of both % based and fixed fees.
I'll have a think about how that could be presented in regards to the options and cost implications. And as a general rule investing is probably one of the few areas where you don't get greater returns the more you spend!
Thanks again!
Great video Edmund live questions would be fantastic
Thanks for the support Stephen! I’ll see what I can do and whether I can get the tech sorted for it!
Thanks Edmund for the info. As a qualified accountant I find pensions are a minefield lol.
Thanks Steve!! 👍 They really are and it isn't helped much by the, what feels like constant changes by the government in regards to legislation, allowances and taxation!!
I’m looking at retirement at 55 at the moment 51 now and pot is 800k. It’s been a hard path but glad I’ve done it
Awesome, well done Mark! 👍👍
800k nice!
Really interesting video. Impact of costs over an investing lifetime are huge!
Thanks!!! Oh yeah, it’s the classic impact of the hit on the ability to compound overtime... and that’s just 1%, at 2% it’s horrendous!! Also the impact of inflation is also greatly under appreciated.
The editing is getting better and better! Nice one 👍
Thanks 🙏 too kind!!! Appreciate the support.
Hello. Thank you so much. Very useful. Would be amazing if you could do a video to cover this scenario for a single person as well :) Is there a way I can access the template you used for these calculations or similar? Thank you
Thanks, great suggestion!! Unfortunately, no its still not available for individuals to access although i am hoping a version will be made available soon.
Great video. In fact the easiest to follow simulation I’ve seen yet. Well done 👍
Thanks for the kind comment Michael!! Really appreciate it! 👍👍
only need to have private pension to cover 12 till getting gov pension. with 300 grand
In the second example you state that the couple contributes £425 per month each from the age of 22 - does that include the 25% added on from HMRC? E.g. £340 X 1.25 = £425 Thanks
If you did your yearly drawdown and so you had enough to pay yourself from the drawdown 12,500 per year so you could still pay £4000 into your pension.? I could pay myself out my company up to £4000 per year which I would be taxed on but when I put it back into my pension would I get that tax back. So in theory you would get 16,500 per year? Is that possible
Been thinking about this a lot lately. Great to hear about your expertise 👍
Thanks for the comment and support!! My videos aren’t as fun as yours though... 😞
deff something I am interested in ... please thank your wife for letting us NHS workers know all about u
Thanks so much Lisa!! That’s very kind of you to say! 🙏
Glad to have found you on RUclips. Your contents are really helpful. The way you explain tricky concepts for small-brained like me is very clear. Would you mind to share the software or spreadsheet that you used on this video?
Wow!! That’s really kind, makes it feel worthwhile. Unfortunately it’s isn’t but I am pushing the company to make it available to the public as the licenses are expensive! The company is CashCalc.
@@EdmundBaileyUK thank you anyway...
Really great content, it's my first time seeing a Monte Carlo simulation, really interesting!
Thanks!!! Yeah the idea is to run multiple scenarios to see the likelihood of achieving something!! It’s easy to forget that market downturns do occur and can last a few years...
Tomorrow is not Guaranteed, retire as early as possible
Another great video, Edmund. Age 55 would be a great age to retire!!
Thanks!! 👍 Yes I certainly meet a lot of people that would be happy to stop working or be financially independent then!
I'm 60 and work for a railway company, I would like to retire at age 62. However as you suggest, everyone's personal circumstances wre different and I think I will go part time as long as possible. I live on my own and am concerned about becoming socially isolated. Going part time has benefits like being still eligible for my European railway pass, credit union etc. For single people it's the way forward.
You don't have to be socially isolated,once retired!
Do volunteer work.My wife works in a railway tea room,and before covid I was a volunteer at Brooklands Motor museum.Its fun chatting to new people,and being socially active.
Retiring is the end of something and the beginning of something new and fun,if you have the right attitude!
Good luck and keep well.
I see a lot of videos of people having already paying into a pension when they’re young but surely the problem now is.... people like me in the mid 30s thinking shit I need to invest more in my pensions and savings
Sounds like a great idea for some content!! Thanks. I pull something together once I've made some time to do so.
Thanks again!
@@EdmundBaileyUK that’s what I’ve been looking for advice on but it’s all mostly videos to people at the beginning of their pension career but not for people realising today they need to have a pension, pay into a pension and have some savings to live a comfortable retirement.
Many thanks
Very informative like always.
Live sessions will be great.
Thanks so much Saleem!!
Appreciate the support!! 🙏🙏
Yes, I think live sessions would be a great way to answer questions as this can be quite a complex area and allows people to follow up with any additional questions that they might think of at the time!
Great videos Edmund,I'm afraid a lot of it went over my head. Would you recommend I talk to an independent advisor if I think I'm being conned by my workplace pension?
What software are you using for this? :)
Ed, are you running any online workshop. I am interested in a live session and know another two who would be. I have MHO status. I started at 18 and reach 55 in two years. I was tapered in 2017 on to the 2015 pension. Are you aware that MHO status is not acknowledged on total rewards?
Question? I have a public sector pension that takes all my yearly personal tax allowance. I also have a personal sipp and an ISA. I was wondering if it could be a good idea to drawdown my SIPP by £20,000 a year to fully subscribe my IAS each year for a tax free income. Is this better tax wise.
Thanks for the question Mark. So the starting point here is generally that taking from a pension to fund an ISA doesn’t really add any tax benefit. Especially where you have a potential IHT issue as the pension is outside the estate whereas the ISA is not. Also the pension can be passed to a chosen beneficiary (children) whereas the ISA value can be used by the spouse only. So generally speaking we will look to use the pension last when using wrappers… e.g. cash first, then ISA and then pensions. As you can imagine here it’s about your beneficiaries here as well and what your objectives are, but essentially I see little value in paying basic rate tax, e.g. lose 20% just to pay that into an ISA. Especially when you consider the 20% given up in tax would have given you further growth/returns that the ISA would lose out on (as long as the investments make a return). Thanks again for the question it’s an interesting one and there’s a little bit of ‘it depends’!
Nice work Ed. Good thorough break down. What cash flow modelling tool are you using by the way?
Thanks! CashCalc! I like Voyant as well but the client portal and factfind on CC are really good and useful.
@@EdmundBaileyUK Yes I use Voyant. Cash flow modelling tools are so important to bring a plan to life.
Really simple -- monthly needs X 240 (12 months@5%growth) -- 5k/month, need £1.2M
Any tips where I can put my money ,if I take money out at age 55/ideally I wanted to keep it in ,but running out of time to take out without tax
Great presentation! What’s the software used here for the simulation? I’d love to run some numbers with my own contributions
Thanks Simon!! Very kind. Yeah its a really good piece of kit called CashCalc but its unfortunately 'presently' only available to companies. I understand that they are looking into a direct to customer version but this always takes ages and the cost realistically would need to come down significantly.
Thanks again.
Ahhh, looks like I’ll be sticking with my home brew GSheets then!
I've never heard of the Monte Carlo test before... But it's probably going to be 2050 before I can retire after the government raises taxes to repay the debt lol
Awesome video L17
Haha, yup there's a whole lot of debt to repay!! Thanks for the support and yeah its a useful tool to attempt to gauge over 10000 market simulations to see whether a plan is likely to succeed or not.
'Monte Carlo' is a good name for these simulations- because in the casino the odds are known. Sadly, in life, this is not the case. Black swans happen- unknown unknowns. Most major financial events were not foreseen, because they were not foreseeable. Simulation cannot, repeat cannot, capture them. Financial plans are like military plans- they fall apart at first contact with the enemy.
Financial advice always recommends a diverse portfolio- but then sticks largely to financial products. That is not diverse- it is very narrow.
Thank you for the comment Mike.
Yes, indeed ''events'' do and will happen. Everyone has a plan until they get punched in the face as an infamous boxer once said. However, you still should have a plan, and the critical point here is that one should live below ones means and save and invest the difference to ideally seek a return above the rate of inflation/return on cash.
The monte carlo calculator simulates over 10,000 markets events at the upper and lower extremes and even then we could indeed have a black swan event that wipes us all out. Having said that even with all of those crazy market events, 2000, 2008, brexit, pandemics, etc and many before it, you can still arguably have remained invested in an index and had a fairly consistent return over that period. There are the factors we can control and those we cannot. We have to pay attention to the areas we can control!
And i don't think anyone would be reckless enough to go into battle without a plan of some kind but contingencies should be in place should the plan change, which it inevitably will!!
How do you fancy doing a collaboration video on investing/retirement, I think it would make for an interesting conversation?
@@EdmundBaileyUK Love to! I wrote a book on financial matters called 'Enough!' (because enough is all you need)- bit out of date now, but it is a subject that has always interested me (indeed, I cannot understand why others are not...) How do we get in touch?
@@Tensquaremetreworkshop I'll look it up!! Probably best to drop a direct message/email somehow and see if we can sort something out and how it might work!
@@EdmundBaileyUK My understanding is that you tube has discontinued direct messages, but there is a way around- if you go to blewshed.home.blog (A site I manage for the Men's Shed movement) there is a contact page, from which I can collect your email address. Looking forward to hearing from you!
Thanks Mike! Yes I couldn’t see any options for direct messaging. That’s great I’ll contact you on there. 👍
Excellent information thank you
Thanks!! Really appreciate that! 👍
Very interesting vs the usual rubbish you find on this topic and makes me feel more confident about being able to retire at 55 (other than not maximising tax by having equal pensions). I think in hindsight most people wish they had contributed more earlier on to get the compounded benefit but you can catch up later on. Ive been focusing (especially during lockdown with reduced outgoings) on maxing my pension contributions to benefit from salary sacrifice / no tax. Other than maxing out a Lifetime ISA for as many years as possible, are there any other must have savings vessels to help bridge that gap between 55 and 67/68 state pension age (lucky me I turn 67 9 days after state pension age changes to 68)?
Stop the ISAs and throw it into a pension (salary sacrifice if your employer offers this)
Thanks Mr Bailey, good stuff!
Thank you! 🙏
Really interesting, great video
Thanks Michael!! That’s really appreciated. 🙏
Thanks
Save as early as you can as sometimes you get retired whether you are ready or not
Very very true… 👍👍
@@EdmundBaileyUK Thank you Edmund and doesn’t have to be no callbacks from job applications,which was my biggest fear, but more and more people are getting sicker younger and unable to work for one reason or another.
Great informative video
WOULD LOVE TO RETIRE AT 55 GIVEN THAT IT'S NEXT YEAR OMG WERE HAVE THE YEARS GONE... DONT THINK I WILL BE PUTTING MY FEET UP NOT GOT ENOUGH SAVED
Nice thought
Yes it is
@@EdmundBaileyUK My sir am thinking of using up a pension plan I have am 63 at present its fund value is enough to get me to 66 when the state pension kicks in I would have to live of a monthly drawdown payment but is does mean I could stop work early I would have to pay all my rent out of it can't I receive any benefits to go with it your views please regards bob
@@robertwilson7736 please I need help how to retire under health condition on the edge of 63.
@@sarahmakepeace26 Dear Sarah are you stuck with job seeking rules on benefit the only way around this is to get a medical exam so you qualify for a ulternative benefit which would give you a fair income with no job seeking rules
Please help me obtaining my pension as i have been a victim of pension scam
I'm really sorry to read this Leslie. There are some absolutely horrible scams out there.
It is limited as to what I can do as it becomes a police matter. You need to contact your pension provider immediately and report it to Action Fraud either on the phone 0300 123 2040 or via their website. Action Fraud will collect the information and give you a police crime reference number.
Link to Action Fraud: www.actionfraud.police.uk/
Very interesting stuff. Hoping I can retire in my 40's!
Thanks!! 🙏 That sounds awesome... it so interesting that the view of retirement has evolved and that financial freedom is achievable from a young age!